Hostname: page-component-cd9895bd7-jn8rn Total loading time: 0 Render date: 2024-12-18T07:12:54.788Z Has data issue: false hasContentIssue false
  • English
  • Français

Assuming Direct Control: The Beguiling Allure of Incomes Policies in Postwar America

Published online by Cambridge University Press:  30 November 2018

Samuel Milner
Samuel Milner*
Affiliation:
Yale University
Get access Rights & Permissions [Opens in a new window]

Abstract:

Histories of American economic policymaking after World War II often describe a “Fiscal Revolution,” in which Keynesian macroeconomic tools replaced the microeconomic regulations and reforms of the New Deal. This article challenges that narrative by demonstrating how the Keynesian economists responsible for the Fiscal Revolution relied upon incomes policies to ensure that inflation would not sabotage efforts to achieve full employment. In the 1960s, the White House Council of Economic Advisers pressed the Kennedy and Johnson administrations to enforce “wage-price guideposts” in order to realize the potential of the Fiscal Revolution. Yet incomes policies also encouraged policymakers to deflect responsibility for inflation onto the private sector’s behavior as an alternative to adopting the painful but necessary fiscal and monetary restraint. As a reliance on the microeconomic control of inflation persisted into the late 1970s, this approach ultimately undercut the Keynesians’ macroeconomic promises and prolonged the misery of stagflation.

Keywords

Fiscal Revolution of 1960–68Keynesian Economicsincomes policiesKennedy administrationinflationwage-price guideposts
Type
Article
Information
Journal of Policy History , Volume 31 , Issue 1 , January 2019 , pp. 42 - 71
Copyright
Copyright © Donald Critchlow and Cambridge University Press 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

NOTES

1. Stein, Herbert, The Fiscal Revolution in America: Policy in Pursuit of Reality, 2nd rev. ed. (Washington, D.C., 1996).Google Scholar

2. Brinkley, Alan, The End of Reform: New Deal Liberalism in Recession and War (New York, 1995);Google Scholar Cohen, Lizabeth, A Consumers’ Republic: The Politics of Mass Consumption in Postwar America (New York, 2003);Google Scholar Jacobs, Meg, Pocketbook Politics: Economic Citizenship in Twentieth-Century America (Princeton, 2005).Google Scholar

3. Collins, Robert M., The Business Response to Keynes, 1929–1964 (New York, 1981);Google Scholar Martin, Cathie J., Shifting the Burden: The Struggle over Growth and Corporate Taxation (Chicago, 1991);Google Scholar Collins, Robert M., More: The Politics of Growth in Postwar America (Oxford, 2000);Google Scholar Bernstein, Michael A., A Perilous Progress: Economists and Public Purpose in Twentieth-Century America (Princeton, 2004);CrossRefGoogle Scholar Domitrovic, Brian, “Does Government Intervention Retard or Foster Economic Growth? The Case of Postwar Prosperity,” Journal of Policy History 29, no. 2 (March 2017): 289–304.CrossRefGoogle Scholar

4. Schonfield, Andrew, Modern Capitalism: The Changing Balance of Public and Private Power (London, 1965);Google Scholar Hogan, Michael J., “American Marshall Planners and the Search for a European Neocapitalism,” American Historical Review 90, no. 1 (February 1985): 44–72;CrossRefGoogle Scholar Eichengreen, Barry, The European Economy Since 1945: Coordinated Capitalism and Beyond (Princeton, 2007).Google Scholar On Nixon: Neil de Marchi, “The First Nixon Administration: Prelude to Controls,” in Exhortation and Controls: The Search for a Wage-Price Policy, 1945–1971, ed. Crawfurd D. Goodwin (Washington D.C., 1975), 295–352; Allen J. Matusow, Nixon’s Economy: Booms, Busts, Dollars, and Votes (Lawrence, Kans., 1998).

5. John T. Woolley, has noted how the repeated lack of success with incomes policies during the 1970s ultimately discouraged policymakers from engaging in active fiscal management, but he does not trace these policies back to their origins in the 1950s and 1960s: John T. Woolley, “Exorcising Inflation-Mindedness: The Transformation of Economic Management in the 1970s,” Journal of Policy History 10, no. 1 (1998): 131–52. See also Waterhouse, Benjamin C., “Mobilizing for the Market: Organized Business, Wage-Price Controls, and the Politics of Inflation, 1971–1974,” Journal of American History 100, no. 2 (September 2013): 454–78.CrossRefGoogle Scholar

6. The most thorough historical accounts of the guideposts, written amid the background of the Great Inflation of the 1960s and 1970s, adhere to a rigid presidential synthesis that obscures the continuities with economic and political thought over the entire postwar period: John Sheahan, The Wage-Price Guideposts (Washington, D.C., 1967).Barber, William J., “The Kennedy Years: Purposeful Pedagogy,” 159–91; and Cochrane, James L., “The Johnson Administration: Moral Suasion Goes to War,” in Exhortation and Controls, 193–292,Google Scholar

7. Leeson, Robert, “The Political Economy of the Inflation-Unemployment Trade-off,” History of Political Economy 29, no. 1 (1997): 117–56;CrossRefGoogle Scholar Mitchell, Daniel J. B. and Erickson, Christopher L., “The Concept of Wage-Push Inflation: Development and Policy” Labor History 49, no. 4 (November 2008): 417–38;CrossRefGoogle Scholar Takami, Norikazu, “The Baffling New Inflation: How Cost-Push Inflation Theories Influenced Policy Debate in the Late-1950s United States,” History of Political Economy 47, no. 4 (2015): 605–29.CrossRefGoogle Scholar

8. Grant McConnell, Steel and the Presidency: 1962 (New York, 1963); George J. McManus, The Inside Story of Steel Wages and Prices, 1959–1967 (New York, 1967). The imperfect results of wage-price policy sometimes receive credit for encouraging Kennedy to embark on his strategy of tax reduction to boost economic performance, but the critical developments of the wage-price guidepost program are reduced to a misguided side project: Kim McQuaid, Big Business and Presidential Power: From FDR to Reagan (New York, 1982), 199–222; Irving Bernstein, Promises Kept: John F. Kennedy’s New Frontier (Oxford, 1991), 140–46; 372–453; Herbert Stein, Presidential Economics: The Making of Economic Policy from Roosevelt to Clinton, 3rd rev. ed. (Washington, D.C., 1994), 104–6; Arthur M. Schlesinger Jr., A Thousand Days: John F. Kennedy in the White House (New York, 2002), 630–36.

9. Bradford DeLong, “America’s Peacetime Inflation: The 1970s,” in Reducing Inflation: Motivation and Strategy, ed. Christina D. Romer and David H. Romer (Chicago, 1997), 247–80; Julian Zelizer, Taxing America: Wilbur D. Mills, Congress, and the State, 1945–1975 (Cambridge, 1998); Robert J. Samuelson, The Great Inflation and Its Aftermath: The Past and Future of American Affluence (New York, 2008); Iwan Morgan, “The Keynesian Consensus and Its Limits,” in The Liberal Consensus Reconsidered: America Politics and Society in the Postwar Era, ed. Robert Mason and Iwan Morgan (Gainesville, 2017), 86–107.

10. Burns, Arthur F., The Anguish of Central Banking (Belgrade, 1979).Google Scholar

11. Lerner, Abba P., “Money as a Creature of the State,” American Economic Review 37, no. 2 (May 1947): 312–17;Google Scholar Reder, M. W., “The Theoretical Problems of a National Wage-Price Policy,” Canadian Journal of Economics and Political Science 14, no. 1 (February 1948): 46–61.CrossRefGoogle Scholar

12. The classic explanation of the internal dilemma of the Bretton Woods system is: Robert Triffin, Gold and the Dollar Crisis: The Future of Convertibility (New Haven, 1961). For background on Bretton Woods: Michael D. Bordo, “The Bretton Woods International Monetary System: A Historical Overview,” in A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform, ed. Michael D. Bordo and Barry Eichengreen (Chicago, 1993), 3–108.

13. Singer, H. W., “Wage Policy in Full Employment, Economic Journal 57, no. 228 (December 1947): 438–55;CrossRefGoogle Scholar Lerner, Abba P., “The Inflationary Process: Some Theoretical Aspects,” Review of Economics and Statistics 31, no. 3 (August 1949): 193–200;CrossRefGoogle Scholar Harris, Seymour E., “The Inflationary Process: In Theory and Recent History,” Review of Economics and Statistics 31, no. 3 (August 1949): 200–210.CrossRefGoogle Scholar

14. Paul A. Samuelson, Economics: An Introductory Analysis (New York, 1948), 409–43; 529–31.

15. Cabinet Meeting of 14 December 1956, Box 8, Dwight D. Eisenhower, Papers as President of the United States, 1953–61 (Ann Whitman File), Cabinet Series, Dwight D. Eisenhower Library, Abilene, Kans.

16. Dwight D. Eisenhower, “Annual Message to the Congress on the State of the Union,” 10 January 1957, in Gerhard Peters and John T. Woolley, The American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=11029.

17. Memo, C. L. Schultze to Raymond Saulnier, 25 January 1957, re: Notes for pp. 5 and 6 of suggested questions submitted by Grover Ensley, JEC Hearings 1957 (Preparation of Materials), Box 16, Records of the Office of the Council of Economic Advisers, 1953–61, Eisenhower Library.

18. “RJS Notes re: FRB Luncheon April 30, 1957,” 3 May 1957, Box 7, Federal Reserve Board, Chairman, Conference with, 1957–60, Raymond J. Saulnier Papers, Eisenhower Library.

19. Saulnier, Raymond J., Constructive Years: The U.S. Economy under Eisenhower (Lanham, Md., 1991), 93–127;Google Scholar McClenahan, William M. Jr. and Becker, William H., Eisenhower and the Cold War Economy (Baltimore, 2011), 81–110.Google Scholar

20. Romer, Christina D. and Romer, David H., “A Rehabilitation of Monetary Policy in the 1950’s,” American Economic Review 92, no. 2 (May 2002): 121–27.Google Scholar

21. Letter, Milton Friedman to Saulnier, 8 February 1957; Letter, Neil Jacoby to Saulnier, 29 January 1957, “Economic Report 1957, Comments on [Non-governmental],” Box 11, Records of the Office of the Council of Economic Advisers, Eisenhower Library.

22. John Kenneth Galbraith, The Affluent Society (Boston, 1958), 167–96, 237–39. See also John Kenneth Galbraith, “Does Monetary Policy Really Work?” Vital Speeches of the Day (1958), 534–36. [His answer was, of course, no.]

23. Samuelson, Paul A. and Solow, Robert M., “Analytical Aspects of Anti-Inflation Policy,” American Economic Review 50, no. 2 (May 1960): 177–94.Google Scholar

24. Burns, Arthur F. and Samuelson, Paul A., Full Employment, Guideposts, and Economic Stability (Washington, D.C., 1967), 53–56.Google Scholar

25. Paul Samuelson, Prospects and Policies for the 1961 American Economy: A Report to President-Elect Kennedy, 6 January 1961, “Recovery Program 12/60–1/61,” Box 20, Walter W. Heller Personal Papers, #103, John F. Kennedy Presidential Library, Boston.

26. Notes on Meeting with President Elect Kennedy Attended by Samuelson, Sorenson, Tobin, and Heller, 5 January 1961, The Heller Council 1/61, Box 3, Heller Papers, Kennedy Library.

27. U.S. Congress, Senate, Committee on Banking and Currency, Nominations of George Docking, Walter W. Heller, Kermit Gordon, and James Tobin, Hearing before the Committee on Banking and Currency, 87th Cong. 1st sess. (Washington, D.C., 1961).

28. Memo, Heller to Solow, 20 February 1961, The Heller Council 2/61–3/61, Box 3, Heller Papers, Kennedy Library.

29. Memo, Kermit Gordon, Notes on Meeting with the President on Monetary Policy, 12 June 1961; Memo, James Tobin to the Files, 28 August 1961, re: Meeting with Chairman Martin and the President on 25 August, Meetings with JFK 1961, Box 6, Heller Papers, Kennedy Library.

30. Memo, Heller to the President, 2 August 1961, re: The Price Situation in General (and Steel in Particular), Steel 5/61–12/61, Box 21, Heller Papers, Kennedy Library.

31. Memo, Heller to Arthur Goldberg, 29 December 1961, Council of Economic Advisers, December 1961, Box 73; Letter, Heller to S. L. Cate, 27 June 1962, Council of Economic Advisers, June 1962: 16–30, Box 74, President’s Office Files, Kennedy Library.

32. Arthur Goldberg’s History of the Steel Crisis, c. 1963, Steel 4/31/62–6/28/62, Box 39, Theodore Sorensen Papers, Kennedy Library, 2–4; Memo, Heller to Tobin, 18 August 1961, re: Steel Prices, Steel 5/61–12/61, Box 21, Kennedy Library.

33. Notes of Meeting, 21 June 1961, Meetings with JFK 1961, Box 6, Heller Papers, Kennedy Library.

34. Circular, Kennedy to Steel Executives, 7 September 1961, Council of Economic Advisers, September 1961, Box 73, President’s Office Files, Kennedy Library.

35. Blough, Roger M., The Washington Embrace of Business (New York, 1975), 77–78.Google Scholar

36. Memo, Heller to the President, 13 October 1961, Memos to JFK 10/4/61–10/16/61, Box 5, Heller Papers, Kennedy Library; “The Economic Future and Government Policy,” Remarks of Walter Heller Before American Life Convention, Chicago, 13 October 1961; “Prices, Wages, and the Public Interest,” Remarks of Walter Heller before the Business Council, Hot Springs Virginia, 20 October 1961, Council of Economic Advisers, October 1961, Box 73, President’s Office Files, Kennedy Library.

37. Kermit Gordon and Walter W. Heller Oral History Interview, Conducted by Joseph Pechman, JFK #1, 7/20/1965, Kennedy Library; Lloyd Ulman, “Unions, Economists, Politicians, and Incomes Policy,” in Economics in the Public Service: Papers in Honor of Walter W. Heller, ed. Joseph A. Pechman and Walter W. Heller (New York, 1982), 112–44; Lloyd Ulman, An Oral History, Interview by Riyad Koya, (2011), Regional Oral History Office, Bancroft Library, UC Berkeley, 110.

38. “Economic Report of the President, Transmitted to the Congress, January 1963” (Washington, D.C., 1963), 185–90.

39. “The Wage-Price Guideposts,” Conference Board Business Management Record (May 1963), 22–31.

40. Economic Report 1962, 16–17, 185; Memo, Heller to the President, 14 February 1962, re: The British White Paper on Wage Policy, Memos to JFK 2/62, Box 5, Heller Papers, Kennedy Library.

41. Memo, Heller to Goldberg, 29 December 1961, Council of Economic Advisers, December 1961, President’s Office Files, Box 73, President’s Office Files, Kennedy Library.

42. David McDonald Oral History Interview, JFK #1 02/15/1966, Interviewed by Charles T. Morrissey, Kennedy Library, 13–14.

43. Memo, Heller to the President, 10 April 1962, Council of Economic Advisers, April 1962, Box 74, President’s Office Files, Kennedy Library.

44. “Exhibit D, Press Release, United States Steel Corporation, April 11, 1962,” in Blough, The Washington Embrace of Business, 128–29; Arthur Goldberg’s History of the Steel Crisis, c. 1963, Steel 4/31/62–6/28/62, Box 39, Theodore Sorensen Papers, Kennedy Library.

45. McDonald Oral History, 15.

46. Arthur Goldberg’s History of the Steel Crisis, c. 1963, Steel 4/31/62–6/28/62, Box 39, Soresen Papers; Memo, Robert F. Kennedy to John F. Kennedy, “Increase in the Price of Steel,” 12 April 1962, Justice, 1962: April–June, Box 80, President’s Office Files, Kennedy Library; United States, Congress, Senate, Committee on the Judiciary, Subcommittee on Antitrust and Monopoly, Refusal of Certain Steel Companies to Respond to Subpenas Issued April 12, 1961 (Washington, D.C., 1962).

47. Edward Gudeman, recorded interview by Dan B. Jacobs, 22 September 1964, 9–13, John F. Kennedy Library Oral History Program.

48. Memo, Evelyn Lincoln to James Tobin, 23 April 1962; Memo, Tobin to the President, 21 April 1962, re: Prices in Europe, Council of Economic Advisers, April 1962; Memo, Tobin to the President, 13 May 1962, re: French Planning and Our Growth Policy Committee,” Council of Economic Advisers, May 1962: 6–15, Box 74. President’s Office Files; Memo, Tobin to the President, 21 May 1962, Council of Economic Advisers, May 1962: 16–31, Box 74, President’s Office Files, Kennedy Library.

49. “Remarks to White House Conference on National Economic Issues”; “Remarks of the President to the Economic Conference,” 21 May 1962; Remarks to White House Conference on National Economic Issues, Box 38, President’s Office Files, Speech Files, Kennedy Library.

50. Memo, “The Present Decline in Perspective,” 29 May 1962, Council of Economic Advisers, May 1962: 16–31, Box 74, President’s Office Files, Kennedy Library. On indicators: Memo, Heller to the President, 25 July 1962, re: Leading Business Cycle Indicators, Council of Economic Advisers, 6/2/62–8/22/62, Box 31, Sorensen Papers, Kennedy Library.

51. Collins, Business Response, 173–90; Stein, Fiscal Revolution, 385–421; Memo, Gudeman to Heller, June 5, 1962, Memos to JFK 6/62; Memo, Heller to the President, July 14, 1962, re: Meeting with Members of the Business Council, Memos to JFK 7/62, Box 5, Heller Papers, Kennedy Library.

52. Council of Economic Advisers Oral History Interview, JFK #1, 1 August 1964, by Joseph Pechman, note 5a, John F. Kennedy Library Oral History Program, Kennedy Library.

53. “Strike Policy and Compulsory Arbitration,” Conference Board Business Management Record 25, no. 5 (May 1963): 3–12; Charles Bartlett, recorded interview by Fred Holborn, 6 January 1965, 113–14, John F. Kennedy Library Oral History Program.

54. Memo, Heller to the President, 23 April 1963, re: Inflation; Council of Economic Advisers, 3/25–63–4/24/63, Box 31, Sorensen Papers, Kennedy Library.

55. Memo, Heller to the President, 24 July 1963, re: Martin’s Posture of Passive Resistance; Memos to JFK 7/63, Box 6, Heller Papers, Kennedy Library.

56. John Lewis, Draft of Policy Position on Wages and Prices, 30 November 1963; Price Wage 1 of 2, Box 41, Kermit Gordon Papers, Kennedy Library; Memo, Heller to the President, 23 November 1963, re: Summary Review of the Economic Situation and Pending Issues, Memos to the President November–December 1963, Box 13, Gardner Ackley Papers, 1936–99, Bentley Historical Library, University of Michigan, Ann Arbor.

57. Confidential Notes of CEA Meeting, 21 September 1963, The Heller Council, 7/63–12/63, Box 4, Heller Papers, Kennedy Library.

58. Memo, Heller to the President, October 2, 1963, re: Administration Posture on Steel, Council of Economic Advisers, October 1963: 1–7, Box 76, President’s Office Files, Kennedy Library.

59. Memo, Lewis to Heller, 10 December 1963, Documentary Supplement Part II [1 of 2], Box 2, Administrative History of the Council of Economic Advisers Administrative History, Lyndon B Johnson Presidential Library, Austin.

60. “Economic Report of the President: Transmitted to the Congress, January 1964” (Washington, D.C., 1964), 10–11, 97, 112–15. For examples of the public acceptance of 3.2 percent: “Johnson Sees Strong Economy in ‘64,” Wall Street Journal, 21 January 1964, 3; Edwin L. Dale Jr., “Economic Report Marks Milestone,” New York Times, 26 January 1964, F1. On Lewis, see John Lewis, Draft of Policy Position on Wages and Prices, 30 November 1963, Price Wage 1 of 2, Box 41, Gordon Papers, Kennedy Library.

61. Memo, Ackley to the President, 14 June 1965, re: The Steel Labor Negotiations; Memo, Ackley to the President, 15 June 1965, re: Steel Negotiations, Memos to the President, May–June 1965, Box 13, Ackley Papers, Bentley Library Memo.

62. Memo, Joseph Califano to Bill Moyers, 3 September 1965; Memo, Ackley to the President, 8 September 1965, re: The Steel Settlement and the Guideposts, EX LA 6/ Steel, 8/27/65–9/8/65, WHCF, Box 29, Johnson Library.

63. Letter, George E Reedy to the President, 3 January 1966, EX BE 4/Steel 1/3/66 [2 of 2], Box 13, WHCF, Johnson Library.

64. Telegram, Johnson to 7 Steel Executives, 2 January 1966; “Agenda,” January 1966, EX BE 4/Steel 8/27/65–1/2/66; “Government Policies of Special Interest to the Steel Industry,” 4 January 1966, EX BE 4/ Steel 1/4/66–3/23/66, Box 13, WHCF, Johnson Library.

65. See, for instance, J. H. Carmical, “Stocks Advance in Slow Session,” New York Times, 5 February 1966, 35; Vartanig G. Vartan, “Stocks Stumble to Low for Year,” New York Times, 22 February 1966, 41; Vartanig Vartan, “Stock Prices Sag as Pace Slackens” New York Times, 24 February 1966, 49.

66. National Bureau of Economic Research, Index of Wholesale Prices for United States [M0448CUSM350NNBR]; U.S. Bureau of Labor Statistics, Unit Labor Costs in Manufacturing, U.S. Dollar Basis, in the United States (DISCONTINUED) [USAULCM]; US. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: All Items [CPIAUCNS], retrieved from FRED, Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/.

67. George L. Perry, “Wages and the Guideposts,” American Economic Review 57, no. 4 (September 1967): 897–904. Solow would comment that while Perry did not conclusively prove that guideposts had worked, he also turned up no evidence that would cause an economist not to attribute causality to the guideposts: Solow, Robert M., “The Case Against the Case Against the Guideposts,” in Guidelines, Informal Controls, and the Market Place: Policy Choices in a Full Employment Economy, ed. Shultz, George P. and Aliber, Robert Z. (Chicago, 1966), 46–47.Google Scholar Perry’s findings would later be criticized for failing to account for changes in structural unemployment and changing inflationary expectations: Robert J. Gordon, “Wage-Price Controls and the Shifting Phillips Curve,” Brookings Papers on Economic Activity 2 (1972): 385–421. Sidney Weintraub, a proponent of incomes policies during the 1970s, also noted that Perry had forgotten another potential causal factor that could explain why wages grew slower in the early 1960s than in the 1950s: Jimmy Hoffa was still in jail: Sidney Weintraub, “Incomes Policy: Completing the Stabilization Triangle” Journal of Economic Issues 6, no. 4 (December 1972): 105–22.

68. Memo, Ackley to the President, 25 April 1966, re: the Prospect for Prices, Memos to the President, April–May 1966, Box 13, Ackley Papers, Bentley Library.

69. Martin, Shifting the Burden, 81–106; Zelizer, Taxing America, 255–82.

70. Memo, Ackley to the President, 22 November 1965, re: CEA’s Meeting with Union Economists; Memo, Ackley to the President, 29 December 1965, re: Wage Guidepost for 1966, Memos to the President, November–December 1965, Box 13, Ackley Papers, Bentley Library.

71. Memo, W. Willard Wirtz to the President, 20 April 1966, re: Airlines Case, EX LA 6/ Airlines 11/23/63–7/8/66, WHCF, Box 20; Memo, Wirtz to the President, 23 July 1966, re: Airline Case; Memo, Ackley to Califano, re: Council Statement on the Proposed Airline Settlement, 1 August 1966; Press Release, 20 August 1966, EX LA 6 / Airlines 7/30/66–9/30/66, Box 21, Johnson Library.

72. Memo, Ackley to the President, 25 February 1967, re: Reactions to your Economic Policy Program, Memos for President, February 1967, Box 14, Ackley Papers, Bentley Library; Memo, Ackley to Califano, 21 December 1967, re: A Possible Approach to the Guidepost Discussion in the 1968 CEA Report, CF BE 5-2 Cost of Living (1967), Box 3, WHCF, Johnson Library.

73. U.S. Bureau of Labor Statistics, Nonfarm Business Sector: Unit Labor Cost [ULCNFB]; National Bureau of Economic Research, Index of Wholesale Prices of Commodities Other Than Farm Products and Foods for United States [M04193USM350NNBR], retrieved from FRED; Peter Lindert and Richard Sutch, “Table Cc1-2 Consumer Price Indexes for all items: 1774–2003,” in Historical Statistics of the United States, ed. Susan Carter et al. (New York, 2006).

74. Letter, William McChesney Martin to the President, 8 April 1966, EX BE Business, Economics 7/28/65–5/28/66, Box 1, WHCF, LBJL.

75. Letter, William Martin to Johnson, EX FI 11–4 10/11/66–12/15/66, Box 60, WHCF, Johnson Library; Bremner, Robert P., Chairman of the Fed: William McChesney Martin, Jr., and the Creation of the Modern American Financial System (New Haven, 2004), 186–259;CrossRefGoogle Scholar Meltzer, Alan H., A History of the Federal Reserve, vol. 2 (Chicago, 2010), 538–47.Google Scholar

76. Johnson, Lyndon B.: “Statement by the President Upon Signing the Tax Bill,” 28 June 1968, in The American Presidency Project , http://www.presidency.ucsb.edu/ws/?pid=28964.Google Scholar

77. U.S. Bureau of Economic Analysis, Gross National Product: Implicit Price Deflator [GNPDEF], retrieved from FRED.

78. Friedman, Milton, “The Role of Monetary Policy,” American Economic Review 58, no. 1 (March 1968): 1–17;Google Scholar Phelps, Edmund S., “Phillips Curves, Expectations of Inflation and Optimal Unemployment over Time,” Economica, n.s. 34, no. 135 (August 1967): 254–81;CrossRefGoogle Scholar Phelps, Edmund S., “Money-Wage Dynamics and Labor-Market Equilibrium,” Journal of Political Economy 76, no. 4, Part 2: Issues in Monetary Research (July–August 1968): 678–711.Google Scholar

79. Richard Nixon, Six Crises, Centennial Edition (New York, 2013), 309–10.

80. Richard Nixon, RN: The Memoirs of Richard Nixon (New York, 1978), 31–32; William Safire, Before the Fall: An Inside View of the Pre-Watergate White House (Garden City, 1975), 509.

81. H. Erich Heinemann, “Humphrey, Nixon Agree on Economic Ends, Differ on Means,” New York Times, 27 October 1968, 2; Janssen, Richard F., “Nixon’s Economics,” Wall Street Journal, 21 October 1968, 1.Google Scholar

82. Memo, William Safire to Objectives Group, 16 October 1969, re: Jawboning vs Backboning, EX BE Business-Economics [1 of 13] 1969, Box 1, White House Central Files, Richard M. Nixon Presidential Library, Yorba Linda, Calif.

83. “Economic Report of the President: Transmitted to the Congress, February 1970” (Washington, D.C., 1970), 6, 33.

84. U.S. Congress, Senate, Committee on Banking and Currency, Subcommittee on Production and Stabilization, Inflation: The Need for a More Balanced Policy Mix, 91st Cong., 2nd sess. (Washington, D.C., 1970), 22–30; U.S. Congress, House of Representatives, Committee on Banking and Currency, To Extend the Defense Production Act of 1950, as Amended, 91st Cong., 2nd sess. (Washington, D.C., 1970), 7–12; Arthur M. Okun, “Political Economy: Some Lessons of Recent Experience,” Journal of Money, Credit and Banking 4, no. 1, part 1 (February 1972): 35–36.

85. U.S. Congress, House of Representatives, Committee on Banking and Currency, Defense Production Act Extension and Economic Stabilization Act, Report together with Minority Views and Additional Views, 91st Cong. 2d sess., No. 91–1330 (Washington, D.C., 1970), 15–16.

86. “Text of Burns Speech on Steps to Fight Inflation and to Extend U.S. Prosperity,” New York Times, 8 December 1970, 34.

87. See, for instance, Letter, Henry Ford II to the President, 31 December 1969, EX BE 5/69 National Economy [37 of 42], 4 December 1969; Letter, Thomas Patton to the President, 24 November 1969, EX BE 5/69 National Economy [40 of 42], 11–15 December; Letter, Edwin Gott to the President, 31 October 1969, EX BE 5/69 National Economy [41 of 42], 18–24 December 1969, Box 58, WHCF, Nixon Library.

88. The Haldeman Diaries: Inside the Nixon White House: The Complete Multimedia Edition (1996), 27 June 1971. I am grateful to Ryan Pettigrew of the Nixon Library for making the files on this outdated CD-ROM accessible.

89. Nixon, RN, 1:641.

90. Although it is often charged that Nixon threatened and cajoled Burns into adopting too expansionary of a monetary policy, the Federal Reserve’s own erroneous beliefs in cost-push inflation and the value of full employment likely would have brought it to this policy conclusion in the absence of presidential manipulation: Thomas Mayer, Monetary Policy and the Great Inflation in the United States: The Federal Reserve and the Failure of Macroeconomic Policy, 1965–1979 (Cheltenham, UK, 1999); Athanasios Orphanides and John C. Williams, “Monetary Policy Mistakes and the Evolution of Inflationary Expectations,” in The Great Inflation: The Rebirth of Modern Central Banking, ed. Michael D. Bordo and Athanasios Orphanides (Chicago, 2013).

91. Arthur M. Okun, “Efficient Disinflationary Policies,” American Economic Review 68, no. 2 (May 1978): 348–52; Memo, Charles Schultze to the President, 29 March 1977, re: Elements of a Comprehensive Anti-Inflation Strategy, Memo, Anti-Inflation [O/A 6338] [7], Box 144, Stuart Eizenstat Files, Domestic Policy Staff, Carter Library; Memo, Schultze to the President, 14 March 1978, re: Background on Inflation, BE 4-2 Confidential 1/20/77–8/16/78, Box BE-16, WHCF, Jimmy Carter Presidential Library, Atlanta.

92. Richard Nixon, “Special Message to the Congress Proposing Establishment of a Cost-of-Living Task Force,” 2 August 1974, in The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=4316.

93. Carl Biven, W., Jimmy Carter’s Economy: Policy in an Age of Limits (Chapel Hill, 2002), 140–44, 202–4;Google Scholar Belden, Susan, “Policy Preferences of FOMC Members as Revealed by Dissenting Votes,” Journal of Money, Credit and Banking 21, no. 4 (November 1989): 432–41.CrossRefGoogle Scholar See also Woolley, “Exorcising Inflation-Mindedness.”

94. Memo, Schultze to the President, 8 December 1980, COWPS Authorization, S.2352, Box 105, CEA Records, Carter Library.

95. Meltzer, A History of the Federal Reserve, 1008–1131; Marvin Goodfriend and Robert G. King, “The Incredible Volcker Disinflation,” Journal of Monetary Economics 52 (2005): 981–1015; Iwan Morgan, “Monetary Metamorphosis: The Volcker Fed and Inflation,” Journal of Policy History 24, no. 4 (2012): 545–71.

96. Draft, “Economic Issues, Wage and Price Controls”; Draft Position Statement, “Wage and Price Controls,” 11 December 1979, Wage and Price Controls, Box 5, Doug L. Bandow Files; Issues, 4c. Inflation Guidelines; COWPS; Vol. Pay Adv. Com., Box 240, Reagan Campaign Papers, Ronald Reagan Presidential Library, Simi Valley; Ronald Reagan: “The President’s News Conference,” 29 January 1981, in The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=44101. The wage-price regulatory program would be eliminated formally in Executive Order 12288 of the same date.

97. Mankiw, N. Gregory, Macroeconomics, 7th ed. (New York, 2010), 398–99;Google Scholar Gordon, Robert J., “The History of the Phillips Curve: Consensus and Bifurcation,” Economica 78 (2011): 25.CrossRefGoogle Scholar